Legal Watch Scotland. June Consultations. Scottish Civil Justice Council. Scottish Civil Justice Council

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1 Legal Watch Scotland June 2018 Consultations Scottish Civil Justice Council Proposed Recovery of Medical Costs for Industrial Disease (Scotland) Bill The consultation on this proposed private member s bill remains open until 22 nd June If passed this Bill has the potential to significantly increase the financial burden on...read more... Scottish Civil Justice Council The Personal Injury Committee of the Council met on the 9 th of April. The Civil Litigation Act took up much of their time and one focus of that discussion was the issue of QOCS and the exceptions included in the Act...read more... Scottish Parliament Bills Case Law 1. Civil Litigation (Expenses and Group Proceedings) (Scotland) Act Financial Guidance & Claims Act Prescription (Scotland) Bill 4. Proposed Damages Bill Re-emphasising the rules on allowing the costs of an expert The case of Margaret Hunter v East Lothian Council [2018] SC EDIN 19, reported in April, concerned whether the costs of a particular expert should be allowed. Margaret Hunter had been injured whist working...read more...

2 Consultations Proposed Recovery of Medical Costs for Industrial Disease (Scotland) Bill The consultation on this proposed private member s bill remains open until 22 nd June If passed this Bill has the potential to significantly increase the financial burden on insurers dealing with industrial disease claims. Should you wish to submit a response, a link to the consultation can be found here. Claims Management Regulation Consultation The UK-wide Financial Guidance and Claims Act 2018 has received Royal Assent. The Act transfers power to regulate claims management companies from the Claims Management Regulation Unit to the Financial Conduct Authority, in England and Wales. It also extends that FCA regulation to claims management companies operating in Scotland who, up until now, were completely unregulated. The scope of the claims management services to be governed by the FCA are not outlined in the Act. Instead, the Act grants the power to define these services to the Treasury. In anticipation of this, the Treasury has been consulting the industry on what to include in the definition and what to keep out. The consultation closed on 1 st June but as you can see below it provides a good indication of the direction of travel that the Treasury intends to take. Regulated services The proposals in the consultation make little change to the scope of regulated services. The current regime relates to six sectors, including personal injury, with a single permission required to cover all regulated conduct across all sectors. Now the proposal is that there should be seven different permissions. Regulated activities across the sectors are defined as: Seeking out, referring and identifying claims. It is likely that this will encompass regulation of cold calling. One permission will enable activity across all sectors. Advising, investigating and representing. It is proposed one permission per sector will be required. Firms will need to be able to demonstrate to the FCA that they have the suitable competency for each sector in which they wish to operate. Exemptions Broadly the Treasury s approach is to retain the current exemptions and extend them to Scotland. Exempted organisations would include charities and not-for-profit agencies. Trade unions are also likely to be exempt. 1

3 Scottish Civil Justice Council The Personal Injury Committee of the Council met on the 9 th of April. The Civil Litigation Act took up much of their time and one focus of that discussion was the issue of QOCS and the exceptions included in the Act. While these exceptions met with broad approval, the Act also allows the Court to provide for rules for further exceptions. The Committee agreed that the following additions should be proposed: 1. Tenders (Part 36 offers) will still be effective. The Committee proposed that if a tender is not beaten, then the claimant will be liable for costs from the date it was served. That benefit should be capped at 75% of the value of the damages received. This cap, however, should only apply to post-tender costs. 2. There should be an exception to the costs protection in the event of a case being dismissed without a hearing. Costs should be left to the court s discretion. 3. An exception to the costs protection where a claimant abandons his case; it was proposed that the current rule should continue. 4. The Committee also recommended that consideration should be given to allowing the Scottish appeal courts discretionary power to remove an appellant s costs protection, but only from the date of the order granting that application. These recommended exceptions echo the discussions in Parliament surrounding this part of the Act. While they reflect a balancing of interests in the litigation process, they also provide an opportunity for insurers to strategically manage their cases to best effect and place pressure on claimants to accept a reasonable offer. Two further exceptions were to be kept under review by the Committee and could potentially reduce the impact of QOCS on the insurance industry. However, it is likely that if implemented claimant s solicitors would look, once again, at their funding models: 1. An exception where the claimant is indemnified against potential liability in costs (e.g. under legal expenses insurance). 2. An exception based on the status or circumstances of the defendant. Compulsory Disease Pre-Action Protocol This protocol, drafted by the Sub-Committee, was put before the PI Committee for its approval. The exact wording of the protocol has not been made public, but it is likely that the framework will not differ too greatly from those of existing protocols. One of the focuses of the Sub- Committee was the speed at which information relating to exposure with multiple employers was forthcoming from claimants. It is hoped that a key part of the compulsory protocol will ensure greater detail about exposure is provided at an earlier stage. The payoff for claimants in doing this would be the possibility of earlier admissions of liability. The draft protocol was approved by the Committee and has now passed to the Costs and Funding Committee for consideration of the fee structure to accompany it. After that, it will go to the full Justice Council for final approval. 2

4 Scottish Parliament Bills 1. Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 Six weeks on from being unanimously approved by the Scottish Parliament, the Bill received Royal Assent on 5th June so is now law. The Act ushers in QOCS and DBAs, but will not come into force without further Regulations being issued by the Scottish Government. We will keep you fully up to date as and when the provisions of the new legislation come into effect. 2. Financial Guidance & Claims Act 2018 Having received Royal Assent, the UK Justice Department is awaiting the outcome of the Claims Management Consultation before finalising the details of implementation. 3. Prescription (Scotland) Bill The Prescription (Scotland) Bill was introduced into the Scottish Parliament on 8 th February 2018, and as reported in last month s bulletin it remains at Stage 1. The Bill has had mixed feedback, and we will report again once stage 1 has completed. 4. Proposed Damages Bill At the last meeting of the Personal Injury Committee of the Scottish Civil Justice Council, the Scottish Government representative once again confirmed that the Bill would be introduced before the summer recess. As recess is due to commence on 30 th June, we hope to bring you details of the Bill in next month s bulletin. 3

5 Case Law Re-emphasising the rules on allowing the costs of an expert The case of Margaret Hunter v East Lothian Council [2018] SC EDIN 19, reported in April, concerned whether the costs of a particular expert should be allowed. Margaret Hunter had been injured whilst working in a nursery school playground, falling and breaking her arm. The Defendant denied liability, so her solicitor instructed a liability expert on her behalf. The case settled without going to trial, and the Claimant s solicitor sought to have the use of the expert allowed by the Court so they could claim his costs. The Defendant opposed this application. The judgement takes the certification test back to basics, and is a useful reminder of what the court needs to know to make a decision. Certification of a witness will only be granted if the judge is satisfied that: a. The person was a skilled person; b. It was reasonable to employ that person. In most cases proving skill is considered to be a straightforward matter by the court concerning qualifications and expertise. The second criteria, however, is often where the conflict lies and is coming up more and more frequently. Consultants are commonly instructed where a GP could have reported, and there has been an increase in the unnecessary instruction of psychiatric experts. All of this adds to the cost of a claim for insurers. Reasonableness of instruction is an objective test and is considered at the time of instruction, not retrospectively. To determine reasonableness, the Court asked four questions: 1. What steps were taken to establish the witness credentials at the time he was selected? 2. The timing of the instruction. 3. What were the relevant issues at the time of instruction? 4. Taking all this into account, did the witness have relevant skill? Ultimately, the Court was not satisfied that it was reasonable to instruct this expert, at the stage at which he was instructed, and certification was refused. The failure on the part of the Claimant s solicitor to produce contemporaneous documents to support their thought process at the time of instruction was fatal to their position. This reasoning is echoed in the decision of the Sheriff Appeal Court in the Plexus case of Cara Webster v Bianca MacLeod, reported on 31 st May This case concerned whether a consultant was an appropriate medical expert in a case involving minor injury, rather than a GP. This is a regular battleground for motor insurers, particularly in whiplash cases. It was clear that the Claimant s solicitor had defaulted to a position of never instructing a GP for a report, despite the GP records making it clear that all the Claimant s symptoms had resolved before the report was obtained. Instead they instructed an A & E Consultant, at the same time as the claim was made to the insurers. While the skill of the Consultant instructed was not doubted, the reasonableness of his instruction was, and certification was refused by the Judge and the Appeal Court. This serves to illustrate that taking a blanket approach to expert instruction so early in proceedings, which does not allow for consideration of the particular circumstances of a case will be penalised. Contd. overleaf... 4

6 The level of analysis applied by the courts, with detailed consideration of the decision-making process by a claimant s solicitor leading up to instruction, means that it is always worth considering whether to challenge an expert where it seems that there is unlikely to have been a reasonable basis for that expert being used. It should also lead claimant s solicitors to think more carefully about who they are instructing, the level of expertise required and what they hope to achieve in the individual case that they are dealing with. The importance of proving causation The next set of cases focus on causation. The first is a case heard in the All Scotland Personal Injury Court where the claim failed, and the second was heard in the Scottish Appeal Court where the claim was successful. Louise McKevitt v National Trust of Scotland [2018] SC EDIN 20 concerned an injury sustained following falling over a stone in gardens owned by the Defendant. The judgement considers the steps the Claimant needed to take to win the case. Having accepted that the stone presented some risk of injury, the Court went on to assess the level of that risk. To succeed the Claimant had to identify the precautions that ought to have been taken, relative to that risk, and show that they would have avoided the accident. It is not enough to identify precautions if it was not reasonable to implement them, or if they wouldn t have avoided the accident in the first place. In this case, the Claimant couldn t identify reasonable precautions that reflected the risk level, and so the claim failed. It is encouraging for liability insurers that the All Scotland Court is willing to take a robust attitude in PL claims of this kind. However, it would seem that if the Claimant had proved that precautions were necessary and reasonable, it is likely that causation would have flowed from the failure to take them. This was the reasoning used by the Scottish Appeal Court in the case of Daniel Kaizer v Scottish Ministers [2018] CSIH 36 where it was found that in general a failure to follow a system will be proof of causation, and enough to establish that the incident could have been avoided. This was the Defendant s appeal where, by the time of the appeal, they had accepted negligence. The Defendant was sued as Prison Authority where their employee failed to report a racist threat made to a prisoner by a fellow prisoner. Subsequently, that prisoner followed through on the threat and caused serious injury. While they accepted they had a system for reporting threats, they contended that failure to follow that system did not mean that causation has been proved. In essence, they argued that even if the employee had reported the threat, they would not have prevented the attack. The Appeal Court did not agree. The prison had a system for reporting bullying and threats which was not followed. The Court (guided by expert evidence on the system) was entitled to conclude that the Defendant would have done something in response to the reported threat that would have reduced the risk so that, in all probability, the attack would not have occurred. Causation was established. 5

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